The Metaphor of a Sales Funnel
We make use of the metaphor of a sales funnel (wide at the very top, narrow at the end) to monitor the sales process. The metaphor of a funnel is used because prospects drop out of different stages of an extended sales process.
Towards the top of this funnel you’ve got ‘unqualified prospects’ – the people who you believe may need your service or product, but to whom you’ve never spoken. At the bottom of the funnel, is those who have received the service or product and have also purchased it.
Using the sales funnel, and by calculating the amount of leads at every point of the procedure, you are able to predict the amount of prospects who’ll, over time, become clients.
Also, by taking a look at how these amounts change over time, you will be able to spot issues in your sales pipeline and take corrective action early.
For instance, in the event that you spot that not many mailings received action during a month, this can signal that a sales decrease is to be expected. The following month, you can ensure that more mailings are sent out. You could also implement an A/B testing strategy to see what is and isn’t working your leads and customers anymore.
Related Reading: How A/B Testing Pays Off in a Content Marketing Plan
Utilization of the Sales Funnel shows obstacle, dead time, and if there is an insufficient quantity of leads at any point. This knowledge enables you to decide where sales agents should focus their attention and efforts to help keep sales at the required level and to also satisfy targets.
The funnel also explains where improvements have to be implemented in your business’s sales procedure. It might be as straight-forward as introducing extra sales coaching or making certain sales reps put adequate emphasis on each step of the process.
Setting Up Your Sales Funnel
The very first stage in establishing sales funnel reporting would be to brainstorm the sales process together with your sales and marketing people to make certain that it is correct and comprehensive.
Out of this, find out the main sequential parts of the sales procedure and, from these, generate status codes. Then, label your leads using these codes (this is easier when you’ve got a sales contact management system). Finally, work-out the amount of prospects of every status and calculate the change from the last month.
As you develop an image of a sales funnel from every month, you can begin to comprehend where you are able to enhance your sales process. Obviously, a product is required before you can start to sell anything though.